A refinance is the process of replacing or revising an existing loan agreement. A loan refinance obligation is carried out to effectively seek a revision of the interest rate, payment schedule or any other terms that may be spelt out in the loan agreement. When refinances are approved, the lender provides the borrower with a new contract agreement that replaces the original one. Loan refinancing majorly takes place when the interest rate environment changes, causing potential savings on repayments from a new agreement. The reason for borrowers seeking refinances is to get more favorable terms with respect to the monthly payments, duration of the loan or switching between fixed-rate and adjustable-rate interest payments. Loan refinances are embarked upon at the request of the borrower.